Several legal and non-legal factors determine and shape controlling party’s behavior and its ability of extracting private benefits of control through opportunistic conducts that harm minority shareholders.

Initially, the paper briefly focuses on the concept of PBC and on the ways its magnitude can be assessed. Starting from the quality of the laws enacted and the level of enforcement granted to them in a given law environment (“law matter” thesis), to other law-related factors such as the level of competition, the labor in the firm, reputational constraints upon management, disclosure standards and the attitude of the judiciary, the paper analyzes the set of constraints preventing corporate control form extracting PBC.

Lastly, the paper focus on the impact that social norms have in influencing controlling party’s behavior, therefore curbing or raising the level of PBC. Differing social norms may provide an explanation for differing levels of PBC in countries where the “law matter” thesis fails to provide it.